Agora(US:API)2024-11-26 15:14Financial Data and Key Metrics Changes - Total revenues for Q3 2024 were $31.6 million, a decrease of 7.7% quarter-over-quarter and 9.8% year-over-year. Excluding low-margin products, revenues increased 2.3% quarter-over-quarter and decreased 3.1% year-over-year [18][21] - Agora's revenues were $15.7 million, up 0.4% quarter-over-quarter and 2.6% year-over-year, driven by business expansion in certain verticals like live shopping [19] - Shengwang revenues were RMB 112.9 million, down 14.5% quarter-over-quarter and 20% year-over-year. Excluding low-margin products, revenues increased 4.2% quarter-over-quarter and decreased 8.7% year-over-year [20] Business Line Data and Key Metrics Changes - The increase in Agora's revenues was primarily due to growth in live shopping and other verticals [19] - Shengwang's revenue decline was attributed to slowing demand in social and entertainment verticals due to regulatory and economic conditions [21] Market Data and Key Metrics Changes - Demand in the U.S. and international markets, particularly in live shopping and social spaces, contributed to revenue growth expectations for Q4 [42] - In China, improvements were noted in IoT and digital transformation, with market share expansion despite challenging economic conditions [43] Company Strategy and Development Direction - The company is focusing on becoming a key infrastructure provider for real-time conversational AI, with structural changes to leverage opportunities in this area [15] - The launch of the conversational AI SDK in collaboration with OpenAI aims to enhance user experiences across various applications [6][7] Management Comments on Operating Environment and Future Outlook - Management expects operating expenses to decrease by approximately $4 million in Q4 and $7 million in Q1 2025 due to recent restructuring [35] - The company targets GAAP breakeven for full year 2025 under conservative revenue assumptions, aiming for moderate revenue growth and readiness for demand from conversational AI use cases [48] Other Important Information - The gross margin for Q3 was 66.7%, an increase from the previous year, primarily due to the end of low-margin products [24] - The company repurchased approximately 6.8 million Class A ordinary shares for $3.9 million, completing 57% of its share repurchase program [30] Q&A Session Summary Question: Impact of recent organization changes on earnings and update on collaboration with OpenAI - Management expects operating expenses to be about $4 million lower in Q4 and $7 million lower in Q1, with minimal impact on revenues [35] - Collaboration with OpenAI has generated interest, with ongoing POC stages and improvements in technology and infrastructure being pursued [36][37] Question: Key drivers for better revenue in Q4 and demand in different markets - Q4 revenue guidance is $34 million to $36 million, driven by demand in both U.S. and international markets, as well as improvements in China [42][43] Question: Outlook for next year regarding revenue and cash flow - The company targets GAAP breakeven for full year 2025 under conservative revenue assumptions, with a focus on moderate revenue growth and operational readiness [48]